As U.S. election season rages on, crypto betting site Polymarket has seen a record month for active traders and volume of cash wagered.
Polymarket has become crypto’s hottest offering during the election campaign, with many using the site to predict who will be president come November. It has even started to gain attention from the mainstream media with The Washington Post, Bloomberg, and The New York Times all citing the crypto gambling protocol.
As a result of this election-related success, Polymarket has seen its most successful in its four year history in July. With three days left of the month, the site has seen over $324 million spent on bets placed by 38,000 traders. To put this into perspective, according to a Dune dashboard, in July 2023 the site hit just 1,200 monthly active traders and $6 million being wagered.
Nine of the top 10 markets by volume on Polymarket are U.S. election related, with the odd one out predicting when the Federal Reserve Board will cut interest rates. Over $400 million has been wagered on who will win the U.S. presidential election—by far the largest amount. The next largest is the $286 million bet on who will be the 2024 Democratic nominee.
From July 21 to 24, the site brought in over $100 million of betting volume peaking at 6,850 daily active traders on July 22, according to the Dune dashboard. This came amid President Joe Biden ending his re-election campaign and Kamala Harris’ campaign as the most likely Democratic nominee beginning.
Ethereum co-founder Vitalik Buterin praised Polymarket after Biden stepped aside, for “predicting [Sunday’s] outcomes well in advance” and providing insight into the Democratic Party’s prospective torch-bearer through “conditional odds of different candidates.”
Really impressive showing from you guys. Not just predicting the outcomes well in advance, but also (through making conditional odds of different candidates visible) serving as an active input into collective decision making.
— vitalik.eth (@VitalikButerin) July 21, 2024
Since then, Harris’ odds of winning the election has settled at 38% with Trump’s chances of winning being 60%. However, this is a stark contrast to polls released last week by Reuters and Ipsos which had Harris pulling ahead of Trump by 2%.
This called into question how reliable Polymarket is for creating predictions in the election and highlighted some big differences in who’s being polled and who’s betting.
American citizens have been blocked from betting on the site since 2022 and, according to a Security report, only 40% of American adults own crypto to be potential users of the prediction market. These factors skew the extent to which Polymarket pools might represent the political voting habits of U.S. citizens.
That said, an Ipsos spokesperson told Decrypt that traditional polls, such as their own, should not be relied on to forecast future events.
Edited by Stacy Elliott.